Because "nothing happens until a sale is made," this enlightening interview with PEO industry veteran Dave Rettig is sure to improve your chances.
What specifically does one look for in hiring a salesperson in the PEO Industry?
On the surface, one might imagine that experience would surely be a key attribute, right? Well the answer is... It Depends. The key here is to dig deep into exactly what their previous experience might have looked liked. In some cases this assessment might be made by simply asking the right questions of the candidate, in terms of the process used in approaching a PEO sale.
Another key question might center around the value proposition employed in closing a sale i.e. time savings, monetary savings or perhaps employee benefits. The question is... can your PEO support these value propositions? More often than not however, it's going to work best if you have at least some familiarity with the training program and organization from which the candidate was previously trained. In many cases it can be more of a challenge to retrain an improperly trained PEO sales professional, than to train an inexperienced sales candidate from scratch.
With respect to those attributes we look for in a candidate with literally no previous PEO sales experience, here are a few attributes that have been somewhat predictive in this selection process.
- Candidates with Prior experience in selling a service B to B
- Some evidence of prior success in selling a relative high dollar, high value service
- Ability and willingness to prospect for new clients
- Commitment to learn the PEO's particular sales process and follow it
- Professional appearance and ability to communicate effectively
- Previous business owners who were involved in the businesses' sales process
- Trusted advisors such as CPA's, Consultants, Financial Planners and Insurance Brokers.
What do you see PEO sales people struggle with the most?
In addressing this subject of sales challenges, there are several that are somewhat unique to the PEO sales professional. What I have observed over the years however, is that one of the biggest struggles that sales consultants in the PEO industry face, at least initially, is one of perception. Those sales consultants who are new to the industry inevitably seem to perceive the PEO's value proposition as one of being able to save prospective client's money on the various components of our service offering i.e. employee benefits, workers compensation insurance and payroll service.
The reality is however, just as in the case of a payroll service, it's not about a monetary savings through the various components of the service offering but instead, it's all about the ability to remove these time consuming issues from the company's day to day operations.
The PEO's ability to remove a great deal of a company's distracting HR issues will ultimately enable the business owner to refocus upon what he/she originally went into business to do. This outsourcing process then over time, results in a reduction of opportunity cost as opposed to an immediate reduction in hard dollar cost. So in a nut shell, it is primarily the value of outsourcing that so many PEO sales professionals struggle with when attempting to communicate this concept during the sales process.
The reality is, however, unless these sales professionals are ultimately able to buy into outsourcing as the primary value driver of the PEO arrangement themselves, they will obviously never be capable of adequately communicating this value proposition to a prospective client. Studies have shown that focusing upon the PEO's component parts as opposed to outsourcing value, will result in more time having been spent on justifying price rather than substantiating value.
Do you find it harder to find good sales managers, or sales people?
The short answer to this question is that it's probably harder to find good sales managers than good sales people in the PEO industry. The reason that I specify the PEO industry is that we are still a relatively young industry compared to many others such as Employee Benefit and P&C agencies, or perhaps those companies involved in payroll processing.
The challenge with a young industry such as ours is that In many ways we are still maturing and accordingly, have probably not been in existence long enough to have developed a stable of really good, well seasoned PEO sales managers. Let me explain why with a bit of PEO history.
Early in our in our industry's infancy when certain individuals began startup employee leasing companies, there were literally no experienced sales managers or Sales People. Consequently, in these startup situations new owners were forced to try and recruit Sales Managers from other industries. With no training and very little knowledge of our industry, these sales managers in turn began to recruit sales people to market employee leasing.
The problem with this, as we have seen over the years, is that these are the caliber of sales managers that provided the foundation upon which the marketing of employee leasing was built. Moving this scenario forward to our current PEO era, the situation has obviously improved somewhat however, there are still many situations where we have minimally trained Sales managers producing minimally trained sales people.
The ripple effect of this is that once these untrained sales people fail and leave the company, they now have a resume showing previous PEO sales experience and are many times hired as Sales managers by the competition. I have literally seen this happen on multiple occasions.
What advice would you give someone starting a PEO with limited or no sales experience on how to grow their business?
First of all I would advise the new owner to prepare for a learning curve and breakeven point that is almost twice as long as originally anticipated. These projections should then be reflected in the amount of funding that is being lined up to finance this venture. The second thing I would recommend is that someone on the investor or management team have at least some experience in managing the sales effort.
Not understanding the challenge involved in being able to properly manage and compensate a sales team can quickly prove to be disastrous. My last suggestion would be that the sales team initially remain small to whatever extent possible until there is some predictably as to where the business is headed
The next thing I might suggest would be for the new owner to begin by taking some of his/her own advice and look at areas where certain functions may be candidates for outsourcing. As unpredictable as things tend to be in a startup situation, the more flexibility you can initially create for yourself, the better chance you will have in being able to survive the many unforeseens than are bound to occur. With respect to the use of outsourcing, following are some of the areas in which I have seen startups outsource at the outset of building their businesses.
Consider, at least initially, outsourcing of the sales effort. Most any PEO broker will be experienced, they are independent contractors and accordingly require no management or dealing with payroll tax issues. In certain cases I have also seen startup PEO's outsource the payroll function to a payroll processing company. This will avoid having to staff, train and manage the department and this function can eventually be brought in-house as the business grows.
Finally, there is the employee benefits area. Many companies continue to outsource this function even after they have been in business for a while and once again, no staffing, training, or managing.
What does the alignment (i.e. hiring, training, marketing, etc) look like for a PEO to experience consistent sales success?
Alignment is definitely a key word here. The areas mentioned, as well as several others, must continually be aligned as they are each critical interdependent functions required in support of sales. So interdependency then becomes another key word to keep in mind in this sales support role that we are attempting to define. For me, the words alignment and interdependency both tie back to one of my favorite terms which is strategic.
Strategic speaks to the practice of taking each issue that arises and viewing it in the context of all other available, related issues. It has been my experience that in company's today, one of the biggest challenges lies in getting the people who work there to think and act strategically.
It is critically important that everyone understands there is indeed an inherent interdependency among all departments within a company. This means that most any action taken within one department will generally have varying degrees impact on almost every other department. What few people in a particular workforce ever truly recognize (including sales) is that for any sale to go to closing, there must first exist at least some degree of alignment among most every department. This support ranges from the initial hiring and training of the right sales consultants, to the marketing department's identification and messaging to a predetermined target market.
It is then the job of sales to identify the prospective client's particular needs and artfully tie our PEO services into a recommended solution. Finally, there is our behind the scenes, unsung hero group that is responsible for everything from the careful on-boarding of new clients by the on-boarding team, to the completion of mistake proof payrolls prepared by the payroll department. This is the caliber of alignment that can help ensure ongoing sales success.
What advice would you give to PEOs who only work with brokers to generate sales?
There can be a number of different ways in which a PEO/Broker arrangement might be structured, but an important issue that should definitely be agreed upon up front, along with compensation, is the extent to which the broker is to become involved in the PEO sales process. In the case of a PEO that works exclusively with brokers to generate sales, all or a majority of work with the client will likely be handled by the broker. Other important issues to be worked out would generally involve such things as who is to determine the pricing and who will be responsible for preparation of the proposals and agreements?
With regard to the question of how to generate sales when working exclusively with brokers, constant communication would be my first suggestion. The more communication a PEO has with its brokers, the better they will get to know each other and the more effective their collaborative efforts will become. Some PEO's do a great job of staying in touch with their brokers through the publication of industry up-dates in the form of newsletters or simply email.
It is sometimes a challenge for independent brokers to stay up to date on changes that may be going on in the industry, therefore industry updates, etc. are generally much appreciated. Another great vehicle for staying in touch might be some voluntary sales training presented in the form of webinars. Also, don't forget that a call in or referral to your PEO office, passed along to a broker, can be a real shot in the arm and in some cases an effective loyalty booster.
For more information, Dave can be reached at davelrettig@gmail.com or (817) 999-7704.
